A Green Belt project aimed at reducing the cycle time for purchase orders finds the bottleneck and dramatically improves the process, exceeding the project’s original goals, and even realizes bonus benefits.
Using the DMAIC methodology, a Green Belt project aims to reduce the cycle time for purchase orders and straighten up a direction-less process.
The accounts payable shared services center (SSC) of a large Ohio-based healthcare system completed a Six Sigma operational enhancement and reporting project. This case study reviews the course of the project which endeavored to establish standard invoice processing times and develop an ongoing system for monitoring how well those standards are met. Over the last…
In 2010, the finance department of a Fortune 500 company established a quality audit (QA) system for the company’s operations. Toward the end of 2011, the general feeling on the floor was that the QA system was effective and the quality of work in the department was improving. The metrics, however, were not improving. A…
“Ensure that every measure of performance is pertinent to the achievement of a goal or value of your organization. Otherwise, you risk misdirecting the organization.” –Peter Drucker, Management: Tasks, Responsibilities, Practices (Harper & Row, 1974) Even in well-managed, global companies, the failure to measure what matters can lead to unintended consequences. Consider the following real-world…
When organizations embark on a continuous improvement program, one of the first steps is to determine how they should measure the success of their projects and program. iSixSigma asked experienced Master Black Belts for their thoughts on the topic.
Earlier this month, a member of the iSixSigma Discussion Forum asked about the best methods to measure financial performance among business units within the same company, but in different regions. The answers that came back ranged from simple bottom-line comparison using accounting department data to more complex metrics, such as profit per item sold and…
When the Sarbanes-Oxley Act (SOX) was ratified in 2002, requiring strict financial reporting standards for publicly owned companies, the law was regarded by many in the business community as an administrative burden. In the eight years since SOX has been in place, however, the reporting rules have helped some companies drive continuous improvement efforts, according…
By Jeffry J. Smith How can practitioners create a rigorous accounting method for measuring the financial benefits from their Six Sigma projects? The key here is being able to translate measured operational benefits into dollars, either in the form of cost reduction, inventory reduction or a revenue increase. The following five areas should be measured…
Just as people follow weather predictions to know if they should carry an umbrella, organizations use forecasting to predict and prepare for future events. Across industries, companies attempt to determine what will happen – they forecast for product or raw material prices, market demand, exchange rates, and numerous other key metrics. Based on these forecasts,…
Businesses are in business to make money. But calculating the true value of any project (Lean Six Sigma or otherwise) with respect to its impact on margin has always been challenging, mainly due to the ambiguity of turning notions into dollar values. For instance, it is clear that training employees will improve expertise and productivity,…
The Quality profession has always been about improving processes, products and services. From TQM to PDCA to Six Sigma, all Quality methodologies are focused on eliminating defects and the root causes of those defects. It involves products that satisfy your customers, running processes at greater efficiencies, producing less waste and increasing business productivity. All of…
Once upon a time there was a company who decided to implement Lean manufacturing. They hired a large prestigious consulting firm who created the grand strategy and trained everyone in lean thinking. Significant operating improvements were identified. It was all documented in a report two inches thick. Teams were launched, a lot of activity took…
The Quality profession has always been about improving processes, products and services. From TQM to PDCA to Six Sigma, all Quality methodologies are focused on eliminating defects and the root causes of those defects. It involves products that satisfy your customers, running processes at greater efficiencies, producing less waste and increasing business productivity. All of…
Financial assessment of process improvement activities is the cornerstone to project selection and to benefit evaluation. Representatives from finance organizations, charged with such a task, may be confronted with assessing a large number of projects out of many different areas within their company. For a detailed benefit assessment, often the mechanics of the process in…
The healthcare industry is going through mergers and acquisitions and facing new economic struggles. As hospitals realize the need to consolidate resources regionally, a big challenge takes shape: handling the information necessary to manage cash flow efficiently. Cash flow management is vital for hospital systems to sustain their daily operations. Our team used DMAIC to…
Sarbanes-Oxley is a law passed in 2002 by the U.S. Congress in response to a series of accounting scandals that impacted several major corporations. The act contains a number of sections, or titles, that require certain activities related to registering with the Public Company Accounting Oversight Board (PCAOB), as well as requirements related to financial…
Six Sigma project metrics are typically taught in detail during Black Belt and Green Belt training classes. But the inconsistent use of these metrics after training can lead to lost opportunities and rework after a project ends. Using project metrics consistently brings enormous clarity to the impact and benefit of a Six Sigma project and…
Most public companies have gone through a period of frenzy ever since the enactment of the Sarbanes-Oxley Act (SOX) in 2002. Corporate leaders, faced with growing regulatory scrutiny and severe penalties, demanded that financial departments and outside auditors “get something in place, now!” People have been scrambling ever since to make sure their companies are…
Magda, the Master Black Belt at a manufacturing plant in the Midwest, was sitting in her office one day in April 2005, when the plant accountant and her good friend, Jeff, burst into her office crying, “They’re going to throw me in jail!” “Calm down, Jeff,” she said. “What’s going on.” Jeff blurted out, “Our…
Six Sigma is a systematic data-driven approach that works across most processes, products and industries. It focuses on improving process performance to enhance customer satisfaction and bottom-line results. Yet, some organizations take a look at Six Sigma and conclude that it will not work for them. Why? Because the organizations know that Six Sigma was…
During the Define phase, it is common that a project is made smaller and more manageable by limiting the scope of the business process it will address. This may, however, cause problems during the Measure and Analyze phases when root causes outside the project scope are found. An exploration of this issue is found in…
John Lopez-Ona, president and CEO of Six Sigma Qualtec, offers his perspective on Six Sigma and return on investment from how to measure ROI in a Six Sigma initiative to the critical success factors in achieving a satisfactory ROI.
Andy Atkins
Gregory Nardin
Dushyant Thatte
Thomas Bertels
Randy Woods
Michael Ohler
Chris Schweighardt
iSixSigma-Editorial
Terence T. Burton
Maria DePool-Lee
Elaine Kowansky
Jin An
Darrel Whiteley
R. Kannan
Alastair Muir
John Lopez-Ona